Americans Are More Willing to Cut Social Security Than Once Thought

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It has long been an axiom in politics that Social Security is politically radioactive, and that politicians court political disaster by pressing for major changes in the nation’s premier retirement program.

Former President George W. Bush suffered a sharp decline in popularity following his 2004 reelection by promoting an ill-fated plan to partially privatize the system by allowing Americans to invest their benefits in private accounts. The more Bush talked about his Social Security proposal, the more unpopular it became. The Gallup organization recorded that disapproval as it grew from 48 percent to 64 percent during the first six months of his second term.

Veteran Republican Rep. Sam Johnson of Texas, the chair of the House Ways and Means Social Security subcommittee, may have touched the so-called “Third Rail of Politics” last week. He introduced legislation to assure the long-term solvency of the retirement trust fund by – among other things – raising the retirement age to 69, raising payroll tax revenues, means testing the system for wealthier retirees and adopting a less generous cost-of-living formula.

Although the trust fund isn’t in imminent danger, the Social Security trustees warned that absent congressional action, it will be exhausted in 2033. Thereafter, the benefits for 61 million retirees and their families would have to be cut by 23 percent. Johnson’s proposal immediately drew sharp attacks from House Minority Leader Nancy Pelosi (D-CA) and other liberal Democrats, who portrayed it as an assault on the 75-year-old retirement system that could lead to cuts in benefits for average beneficiaries of a third or more.

However, a comprehensive survey by the University of Maryland’s Program for Public Consultation released shortly before the election found that two-thirds or more of Republican and Democratic registered voters agreed on steps along the lines of Johnson’s proposal that would cover at least two-thirds of the projected shortfalls in the trust fund. A slightly smaller majority of voters (59 percent) said they would back even more stringent measures to wipe out the shortfall entirely.

Perhaps the most popular measure, according to the survey, would be raising the cap on income subject to the federal payroll tax from $117,000 to $215,000 per year. Some 88 percent of the GOP and Democratic respondents said they would favor that approach. Another idea with widespread appeal is raising the retirement age for full benefits to 68, which garnered 79 percent approval. The retirement age is currently 66 and is scheduled to rise to 67 by 2027 under current law.

Another revenue measure with high voter appeal, according to the survey, is raising the federal payroll tax from 6.2 percent to 6.6 percent. That idea drew an overall approval rating of 76 percent. Meanwhile, proposed cuts in benefits for those in the top 25 percent income levels drew support from more than seven in ten voters.

Another popular idea – but one that would add to the long-term Social Security shortfall – is raising the minimum monthly benefit for those who have worked 30 years or more, from $800 to $1,216. The current minimum benefit is below the federal poverty line. Sen. Bernie Sanders (I-VT) and numerous liberal Democrats have clamored for an increased benefit, especially for widows struggling to make ends meet. Some 58 percent of those interviewed for the project favored increasing the minimum benefit, although Democrats were far more in favor of that than Republicans.

Other ideas fell flat with voters interviewed for the project, including changing the way the Labor Department calculates the cost of living adjustment. Less than a third of voters supported the so-called “Chained CPI” method that would likely slow the rate of increase, an idea that has been advanced by a number of Republicans and President Obama as well to slow the rate of growth in Social Security spending.

Meanwhile, just three in ten say they would go along with basing the COLA primarily on what elderly people tend to buy, an approach that would accelerate the rate of increase in spending and add to the trust fund’s financial woes.

It’s hard to exaggerate the importance of the Social Security system, created in 1935 during the Great Depression, to tens of millions of seniors and retirees. Among elderly Social Security beneficiaries today, 53 percent of married couples and 74 percent of unmarried persons receive half or more of their income from Social Security, according to the study. What’s more, 22 percent of married couples and 47 percent of unmarried people depend on Social Security for 90 percent or more of their income, the study says.

Much of the previous polling by Gallup and other organizations suggest that many Americans are highly concerned about the future of Social Security – including many who doubt there will be anything left in the trust fund by the time they retire. However, they are dubious about specific proposals for assuring the program’s long-term solvency. Many of the polls asked voters specifically whether they would approve or disapprove of a major change in Social Security without providing much background, and the result was frequently for voters to say no.

Yet the responses were quite different in the survey results released in mid-October by the non-partisan, non-profit Program for Public Consultation which over the years has embraced a more sophisticated approach. Rather than simply responding to a series of yes or no questions about their attitudes on Social Security and other entitlement reform, the PPC technique requires voters to play the role of policy makers and consider the pros and cons of a set of proposals for assuring the long-term solvency of Social Security.

“The significance of these findings are that if leaders wanted to engage the public in a way that says, okay, we have this problem, let’s think about the solutions, here are the possibilities, what do you think . . . they could get engaged,” said Steven Kull, a political psychologist and director of PPC who wrote the report. “In the end, the voters can come to terms with some hard choices.”

Kull noted that in 1983, the last time the retirement trust fund faced a financial crisis, a bipartisan commission headed by Alan Greenspan and key members of Congress worked out a compromise that largely satisfied the public. “We didn’t have rioting in the streets and I’m not aware of anybody who lost their seat because of a vote on that. So if there is the political will in Congress, what I think the survey shows is that the public can get on board with it.”

In all, 8,697 registered voters across the country randomly selected by Nielsen-Scarborough, a public opinion and consulting operation, took part in the study. The research project specifically targeted or oversampled large, politically and demographically diverse states including California, Ohio, Florida, Texas, New York, Oklahoma and Virginia. GOP and Democratic congressional staff members and experts at the National Academy of Social Insurance and the American Enterprise Institute reviewed the explanatory material used in the simulation for accuracy and balance.

For example, on raising the retirement age – arguably one of the more controversial proposals – voters were told that the strongest case to be made is that people are now healthier and generally have physically less demanding jobs than in the past. They should be able to remain on their jobs for a longer period of time. Moreover, they were told, there would be nothing to prevent people from taking an early retirement at 62 if they so choose, although they would receive roughly 20 percent smaller benefits than if they waited for full retirement.

But the argument used against raising the retirement was that it actually would be unfair to workers in their 60s who continue to hold physically demanding jobs, such as in nursing or construction, that require them to be on their feet all day or undertake physically exhausting tasks. Even having to wait until just 67 to qualify for full retirement would be difficult for some.

After weighing these and other factors, 79 percent of the voters interviewed favored gradually raising the retirement age to at least 68, with Republicans and Democrats in virtual agreement.

Members of the so called “Citizen Cabinet” gradually embraced policies for addressing the problem rather than voicing strong opposition or outrage. In short, the exercise was far from touching the third rail of politics, according to Kull.

“What we see in this study is that voters want to see some increases in revenue, they want to see the higher earners paying more, they’re up for diminishing the benefits of the top 25 percent (income earners) but not the top 50 percent, they’re up for raising the payroll tax rate, but not by a lot, and they’re up for raising the retirement age to 68 – but not 69,” as Sam Johnson has proposed.

The University of Maryland- based research program is primarily funded by The Democracy Fund, a bipartisan foundation established by eBay founder and philanthropist Pierre Omidyar, and the Hewlett Foundation, a nonpartisan, private charitable organization. Both foundations say they seek to promote strengthening democratic institutions.

Washington Editor and D.C. Bureau Chief Eric Pianin is a veteran journalist who has covered the federal government, congressional budget and tax issues, and national politics. He spent over 25 years at The Washington Post.